Sainsbury's chief executive Justin King has told ITV News that the chain's popular toys range is "new competition" for businesses like Mothercare, whose shares fell 30% today.
Sainsbury's enjoyed its busiest trading week ever in the run-up to Christmas, helping like-for-like sales in its latest quarter climb by 0.2%.
Chief executive Justin King said the 14 weeks to January 4 had been a "very tough sales environment" but the supermarket managed to maintain its record of growth - after it was forecast to fall after 35 successive periods of expansion.
Mr King said the seven days prior to Christmas was the group's busiest ever trading week, with more than 28 million transactions.
The CEO of Sainsbury's has warned that while the British economy may be seeing positive signs of recovery, individual consumers are still finding their purchasing power reduced.
"I think what we're seeing is lots of good signs of recovery for the economy," Justin King told ITV News, "whether it be lower inflation or job creation and so on."
"But as far as individuals are concerned, they're seeing low pay rises, they're still seeing inflation - it came down yesterday but it was still 2.2% - and so on average they've got less money to spend.
"So whilst it's good news to feel that you're living and working in a country where things are getting better, in the end it's what happens to you as an individual that's going to make a difference to your shopping habits."
Supermarket Sainsbury's has posted its half-year results for the 28 weeks to 28th September 2013.
Chief executive Justin King said: "Our share of the grocery market is the highest for a decade at 16.8 per cent following 35 consecutive quarters of like-for-like sales growth.
"Whilst customers’ budgets remain tight and any recovery in the economy may take time to take effect, our consistent strategy and strong values-driven culture mean we are well placed to continue to deliver for customers, colleagues and shareholders."
Tesco has rejected claims made by Sainsbury's that its Price Promise is "misleading".
Tesco's UK marketing director David Wood said: "Sainsbury's argument against Price Promise has been heard and rejected twice already.
"Tesco Price Promise offers customers reassurance on the price of their whole shop, in store and online, not just the big brand products.
"When family budgets are under pressure, that is the kind of help customers want and the real question for Sainsbury's is why they aren't trying to do the same for their customers."
Sainsbury's commercial director Mike Coupe said it was "time to take a stand" on the row over the Tesco Price Promise, which the supermarket believes does not offer a fair comparison.
Mr Coupe said:
"Tesco says that whether, for example, a product is Fairtrade or MSC [Marine Stewardship Council] certified is just a 'minor part' of a customer's considerations - especially for value products. We disagree.
More than ever, customers want to let their values guide them and in price-matching its products with ours, Tesco is - when it sees fit - choosing to ignore factors such as ethical or provenance certification or even country of origin.
The Tesco Price Promise is a money-back pledge that compares the price of goods in a shopper's trolley at the checkout with prices at rival supermarkets Asda, Sainsbury's and Morrisons.
Any difference on comparable products is then refunded in the form of a Tesco voucher worth up to £10.
Sainsbury's believes the pledge misleads consumers because it does not make fair comparisons by, for example, matching products such as its Everyday Value Tea, which is not Fairtrade, with Sainsbury's basics tea, which is.
It added the pledge is also misleading on its basics water, which comes from a spring in Yorkshire, and is compared with Tesco's Everyday Value water, which Sainsbury's claims starts at the mains supply.
Sainsbury's is stepping up its fight against Tesco's Price Promise campaign in a long-running row over comparisons between the two firm's products.
Britain's third-biggest supermarket chain is to take its battle into the courtroom, by requesting a judicial review against a ruling by the Advertising Standards Authority (ASA) that rejected its complaint over the Tesco pledge.
The move comes after Sainsbury's lost an appeal against the ASA decision earlier this month, when a report by the watchdog's independent reviewer Sir Hayden Philips backed the ASA findings.
Mike Coupe, Sainsbury's commercial director, said it was "time to take a stand" on behalf of customers to ensure shopping decisions are not just based on price, but also factors such as ethics and provenance.
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